The following information relates to Questions 1 and 2, You have been approached by a Multi-National Corporation based in Johannesburg to help with managing their transaction exposure. They present you with the following information: Tables A and B: Income and Expenses EXPENSES PAYABLE DAYS SPOT RATE FUTURES RATE INCOME $350 000 150 RECEIVABLE DAYS € 750 000 120 R 14.80 R16.50 SPOT RATE R16.50 FUTURES RATE R18.20 Table C: Country Specific deposit and borrowing annual rates COUNTRY DEPOSIT LOAN EU 5.90% 5.72% USA 6.35% 6.63% RSA 8.15% 7.50% Table D: Option Pricing for the ZAR/US$ OPTION: ZAR/US$ PUT CALL EXERCISE PRICE PREMIUM R15.60 RO.50 R15.40 RO.45 Table E: Option Pricing for the ZAR/€ OPTION: ZAR/€ PUT CALL EXERCISE PRICE PREMIUM R17.80 R0.40 R17.50 R0.46 Tables F and G: Probability Distribution for US Dollar and Euro ZAR/US$ PROBABILITY R15.00 40% R15.60 25% R16.10 35% ZAR/€ PROBABILITY R17.10 30% R17.90 45% R18.50 25% 1. The real cost of hedging using the Money Market Hedge for Receivables is closest to? A. R362 936.47 B. R888 657.08 C. R921 929.24 D. - R399 537.52 E. None of the above 2. The effective rate for the Option Hedge for Payables is closest to? A. R 17.62 B. R 15.86 C. R 15.69 D. R 15.24 E. None of the above 2
The following information relates to Questions 1 and 2, You have been approached by a Multi-National Corporation based in Johannesburg to help with managing their transaction exposure. They present you with the following information: Tables A and B: Income and Expenses EXPENSES PAYABLE DAYS SPOT RATE FUTURES RATE INCOME $350 000 150 RECEIVABLE DAYS € 750 000 120 R 14.80 R16.50 SPOT RATE R16.50 FUTURES RATE R18.20 Table C: Country Specific deposit and borrowing annual rates COUNTRY DEPOSIT LOAN EU 5.90% 5.72% USA 6.35% 6.63% RSA 8.15% 7.50% Table D: Option Pricing for the ZAR/US$ OPTION: ZAR/US$ PUT CALL EXERCISE PRICE PREMIUM R15.60 RO.50 R15.40 RO.45 Table E: Option Pricing for the ZAR/€ OPTION: ZAR/€ PUT CALL EXERCISE PRICE PREMIUM R17.80 R0.40 R17.50 R0.46 Tables F and G: Probability Distribution for US Dollar and Euro ZAR/US$ PROBABILITY R15.00 40% R15.60 25% R16.10 35% ZAR/€ PROBABILITY R17.10 30% R17.90 45% R18.50 25% 1. The real cost of hedging using the Money Market Hedge for Receivables is closest to? A. R362 936.47 B. R888 657.08 C. R921 929.24 D. - R399 537.52 E. None of the above 2. The effective rate for the Option Hedge for Payables is closest to? A. R 17.62 B. R 15.86 C. R 15.69 D. R 15.24 E. None of the above 2
Chemistry
10th Edition
ISBN:9781305957404
Author:Steven S. Zumdahl, Susan A. Zumdahl, Donald J. DeCoste
Publisher:Steven S. Zumdahl, Susan A. Zumdahl, Donald J. DeCoste
Chapter1: Chemical Foundations
Section: Chapter Questions
Problem 1RQ: Define and explain the differences between the following terms. a. law and theory b. theory and...
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Transcribed Image Text:The following information relates to Questions 1 and 2,
You have been approached by a Multi-National Corporation based in Johannesburg to help with
managing their transaction exposure. They present you with the following information:
Tables A and B: Income and Expenses
EXPENSES
PAYABLE
DAYS
SPOT RATE
FUTURES RATE
INCOME
$350 000
150
RECEIVABLE
DAYS
€ 750 000
120
R 14.80
R16.50
SPOT RATE
R16.50
FUTURES RATE
R18.20
Table C: Country Specific deposit and borrowing annual rates
COUNTRY
DEPOSIT
LOAN
EU
5.90%
5.72%
USA
6.35%
6.63%
RSA
8.15%
7.50%
Table D: Option Pricing for the ZAR/US$
OPTION: ZAR/US$
PUT
CALL
EXERCISE PRICE PREMIUM
R15.60
RO.50
R15.40
RO.45
Table E: Option Pricing for the ZAR/€
OPTION: ZAR/€
PUT
CALL
EXERCISE PRICE
PREMIUM
R17.80
R0.40
R17.50
R0.46
Tables F and G: Probability Distribution for US Dollar and Euro
ZAR/US$ PROBABILITY
R15.00
40%
R15.60
25%
R16.10
35%
ZAR/€
PROBABILITY
R17.10
30%
R17.90
45%
R18.50
25%
1. The real cost of hedging using the Money Market Hedge for Receivables is closest to?
A. R362 936.47
B.
R888 657.08
C. R921 929.24
D. - R399 537.52
E. None of the above
2. The effective rate for the Option Hedge for Payables is closest to?
A. R 17.62
B. R 15.86
C.
R 15.69
D. R 15.24
E. None of the above
2
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